Even internally, Microsoft mum on Yahoo ‘synergies’

Announcing their bid for Yahoo last week, Microsoft executives declined to give any public clues about what would be kept and what would be dumped during the integration process, if the acquisition goes through. Turns out the company wasn’t much more forthcoming with its employees during an internal webcast about the Yahoo plan.

We know this because Microsoft filed a transcript of the webcast with the Securities and Exchange Commission earlier this week. As reported previously by CNet News.com’s Ina Fried, the transcript did reveal details about the timing of the next Windows Live and Live Search releases.

But executives didn’t give employees any real specifics about how a Yahoo-Microsoft integration would play out, if it happens. In his comments to employees, Kevin Johnson, president of Microsoft’s Platforms & Services Division, acknowledged questions about the fate of overlapping Microsoft and Yahoo properties and services.

“Well, what does this mean when we’ve got to do this integration process? And does it mean we’re going to use their mail, Yahoo mail, or are we going to use Live mail? Are we going to use the Yahoo portal or MSN portal?” Johnson, according to the transcript.

Johnson didn’t answer those questions, but he said Microsoft has a “very clear line of sight to the synergies we’re trying to accomplish” and “a clear set of integration principles — not the full integration decisions, but a set of principles.” He told employees that the company would have leaders from both Microsoft and Yahoo go through a thoughtful process” to determine the specifics.

What about jobs? Here’s what Johnson told employees on that topic.

Look, a key synergy we’ve identified in this combination is really about expanded R&D capability.

It doesn’t make sense to have thousands of engineers at Yahoo working on a search index, thousands of engineers at Microsoft working on the same search index. By combining, we can have one team of people across the two companies working on the search index, and then have others continue to focus on areas where we’ve defined differentiation in search. New search verticals and expanded user experience for search. We’ve got so many ideas, more engineers applied to those ideas will drive breakthroughs in search. This is about expanding our engineering capability.

Now, certainly, you look and say, well, we also understand it’s about operational efficiency. Yes, it is. There are duplicate costs across Yahoo and Microsoft. Let’s just take some off the capital expenditures. The number of servers and data centers and power and infrastructure to support this. The fact is, that infrastructure is supporting a search index at Yahoo and a search index at Microsoft. We can be more efficient.

We intend to do that. It also means looking at every discipline and ensuring, number one, that we have the right people in the right jobs and, number two, the right amount of resources allocated to that particular function. Again, that will be handled in a very thoughtful process. For now, we’ve got to stay focused on the good work that’s going on, full speed ahead.